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A HETEROGENEITY ANALYSIS OF THE BOLSA FAMÍLIA PROGRAMME EFFECT ON MEN AND WOMEN’S WORK SUPPLY Clarissa Gondim Teixeira.

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Presentation on theme: "A HETEROGENEITY ANALYSIS OF THE BOLSA FAMÍLIA PROGRAMME EFFECT ON MEN AND WOMEN’S WORK SUPPLY Clarissa Gondim Teixeira."— Presentation transcript:

1 A HETEROGENEITY ANALYSIS OF THE BOLSA FAMÍLIA PROGRAMME EFFECT ON MEN AND WOMEN’S WORK SUPPLY Clarissa Gondim Teixeira

2 Introduction Bolsa Família Program – the Brazilian CCT Origin: PBF starded in 2003 as a result of the fusion of existing cash transfer programs Motivation: Achieve the MDGs – short-run poverty reduction (cash transfer) Universal policies failure to provide access to basic services – increase demand for education and health (conditionality) Breaking intergenerational poverty cicle – investment in humam capital (conditionality)

3 Introduction PBF positive effects: Increase in food consumption and educational expenditures (CEDEPLAR, 2005) (IFPRI, 2010). Reduction in inequality and poverty rates (Chein, Andrade and Ribas, 2006) Increase in school attendance but no consensus on child labor effects (Cardoso y Souza, 2004), (Cacciamali, Tatei y Batista, 2008), (Pedrozo, 2007), (IFPRI, 2010).

4 Introduction Frequent criticism concerning negative effects on labor supply: No change in income – question the effectiveness of the program Generates dependency – concern with exit doors

5 Introduction Objectives of the paper are: Identify the existence of PBF´s impact on men and women´s participation rate and journey; Through the disaggregated analysis by sex, type of occupation and ‘dose-effect’: ▫Explain the relation of receiving cash transfers and labor supply; ▫Identify and characterise the individuals whose labour supply are the most elastic.

6 Literature review Time allocation theory (Becker, 1965) Income and subsititution effects (Parker and Skoufias, 2000) Multiplier effects (Martínez, 2004) Informal work and production function (Cardoso, 1999) Additional worker (Stephens, 2001) ‘Collective approach’ of intrahousehold resource allocation (Chiappori, 1992)

7 Literature review Individual level  Increase in participation rate greater for women- Cedeplar (2005)  Increase in participation rate - IFPRI (2010)  Decrease in participation rate and labor hours for mothers -Tavares (2008)  No effect participation rate, decrease in labor hours, increase for rural women - Ferro Nicollela (2007) Municipal level  No effect - Foguel Barros (2008)  Participation rate: increase rural, decrease urban – Ribas, Soares, Soares (2010)

8 Elegibility criteria: extremely poor families and poor families with children. Targeting Self-declared income verified by cross checking with formal work data Analysis of Single Registry information Inclusion and exclusion errors Bolsa Família Programme (PBF)

9 Cash Transfers: Variable transfer of US$7.00 per child or nursing mother maximun of 3 per familiy (avoid incentive to childbearing); Fixed transfer of US$23.00 only for extremely poor families with or without children. Monthly per capita incomeTransfer values (2006) Below extreme poverty line (US$ ) US$ US$ US$ US$ Between extreme poverty line (US$ 23.00) and poverty line (US$ 46.00) US$ US$ US$ 7.00

10 Bolsa Família Programme (PBF) Conditionalities: -85 % of school attendance; -Vaccination for children under 6 years old; -Pre and pos natal care for women.

11 Bolsa Família Programme (PBF) Exit doors: -Age of child (does not punish progression) -Family per capita income above eligibility – single registriy updated every 2 years (vulnerability )

12 Labor market of the poor Source: PNAD Own calculation.

13 Labor market of the poor Source: PNAD Own calculation. MenWomen

14 Labor market of the poor AIBF 82% Urban - PNAD 67% Urban Source: AIBF 2005 and PNAD Own calculation. MenWomen

15 Evaluation estrategy Cross section using annual household data – PNAD 2006  Cash transfer supplement Quasi-experimental design Propensity Score Re-weighted multivariable regression Cluster in the household level

16 Empirical Investigation Source: PNAD Own calculation

17 Results The average effect on the probability of working is not significant for men or women.

18 Results PBF does not cause a large work ‘discouragement’ Women are more sensitive to an income shock

19 Results Work hoursMen Women Men Women Rural-1.08 *** Agricultural-0.81 ** Urban ** Non-agricultural-0.53 * * Source: PNAD Own calculation.

20 Results Work hoursMen Women Men Women Formal worker Rural-0.62 Agricultural Urban Non-agricultural Informal worker-0.88 *** * Rural-1.14 *** Agricultural-0.92 ** Urban ** Non-agricultural-0.83 ** * Source: PNAD Own calculation.

21 Results Work hoursMen Women Men Women Self-employed * Rural Agricultural Urban *** Non-agricultural Paid worker-0.84 *** * Rural-1.77 *** Agricultural-1.22 ** Urban Non-agricultural-0.54 * Source: PNAD Own calculation.

22 Results Source: PNAD Own calculation. Cost of labor hour (Minimal wage)Men Women ***

23 Results Formal work is found to be the least elastic due to workers’ rights and income stability; Urban self-employed women are the most sensitive to the PBF transfer; Informal paid rural jobs are the most sensitive for men. Unpaid workers reduce their labor hours in contrast with those earning one or two minimal wage

24 Results Transfer Value (R$)Men Women ** ** ** *** **

25 Conclusion One cannot affirm that PBF is responsible for generating dependence on account of income transfers The results also confirm that the elasticity of labor supply varies according to sex and type of work. Higher effects were found for greater income shock intensities


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